NNPCL Chases $2bn Loan as Fuel Queues Linger

Mele Kyari

NNPCL Seeks $2bn Loan Amid Fuel Subsidy Crisis

NNPCL requests a new $2 billion loan as long queues form at gas stations...

NNPCL seeks new $2 billion loan to boost capital and fund economic ventures, despite marketers' warnings of potential harm to Nigeria's oil industry. Long queues form at gas stations as fuel scarcity persists.

Group Chief Executive Officer Mele Kyari stated that the Nigerian National Petroleum Company Limited (NNPCL), is in the process of arranging another loan backed by oil in order to strengthen its capital and encourage economic ventures.

According to sources, the NNPCL wants to use this new loan to raise at least $2 billion.

NNPCL had stated in August 2023 that it has secured a $3.3 billion emergency credit from the African Export-Import Bank to repay crude oil.

The planned $2 billion loan would bring NNPCL's total amount of crude-backed loans to $5.3 billion.

Mele Kyari stated that the new loan will be secured by the production of 30,000–35,000 barrels of crude oil per day, although he did not state how much was being sought.

This occurs as lines for Premium Motor Spirit, or PMS—also known as gasoline—kept growing on Tuesday, July 9, in Lagos, the commercial center of Nigeria, and nearby states like Abuja.

Marketers attributed the shortages on NNPCL's restricted supply, as NNPCL is Nigeria's only importer of PMS. Some traders have stopped importing because they are having trouble getting US money.

Additionally, marketers cautioned NNPCL against acquiring debts backed by crude, citing potential harm to Nigeria's oil industry.

Read Also: Fuel Subsidy Removal Sparks Nationwide Queues, Price Hike

Information surfaced that NNPCL owes gasoline suppliers $6 billion, which is twice as much as it owed in the previous four months. Olufemi Soneye, a spokesman for the NNPCL, denied this assertion.

NNPCL's oil exports, which also supply vital foreign exchange reserves, are a major source of funding for the Nigerian government. But oil production has decreased due to pipeline theft and years of underinvestment, and the expense of fuel subsidies has further depleted cash reserves.